AP12-3 Comparing Loan Requests from Two Companies by Using Several Ratios (@P12-5) L012-6, 12-7. 12-8, 12-9, 12-10 eXcel The 2020 financial statements for Rand and Tand companies are summarized below Tand Company $ 45,000 Statement of Financial Position Rand Company Cash $ 25,000 Accounts receivable (net) 55,000 Inventory 110,000 Property, plant, and equipment (net) 550,000 Other assets 140,000 Total assets $880,000 Current liabilities $120,000 Long-term debt (12%) 190,000 5,000 25,000 160,000 57.000 $292.000 $ 15,000 55.000 Share capital 480,000 210,000 Contributed surplus 50,000 4,000 Retained earnings 38.000 7,000 2,000 1,000 Other comprehensive income Total liabilities and shareholders' equity $880,000 $292,000 Statement of Earnings Sales revenue (on credit) (VA) $280,000 (%) $800,000 (480,000) Cost of sales (150,000) (240,000) (95,000) $ 80,000 $ 35.000 Expenses (including interest and income tax) Net earnings Selected Data from the 2019 Statements Accounts receivable, net Long-term debt (12%) $ 47,000 $ 11,000 190,000 55,000 Inventory 95,000 38,000 Other Data $ 14.00 $ 11.00 30% 30% Share price at end of 2020 Income tax rate Dividends declared and paid in 2020 Number of common shares during 2020 $ 20,000 $ 9,000 24,000 10.500 These two companies are in the same line of business and in the same province but in different cities. Each company has been in operation for about 10 years. Rand Company is audited by a national accounting firm, Tand Company is audited by a local accounting firm. Both companies received an unqualified opinion (1.c., the independent auditors found nothing wrong) on the financial statements, Rand Company wants to borrow $75,000 cash, and Tand Company needs $30,000. The loans will be for a two-year period and are needed for working capital purposes Pare 725 Required: 1. Complete a schedule that reflects a ratio analysis of cach company Compute the ratios discussed in the chapter 2 Assume that you work in the loans department of a local bank. You have been asked to analyze the situation and recommend which loan is preferable. Based on the data given, your analysis prepared in (1), and any other information give your choice and provide a supporting explanation